Ask 10 people “What is digital transformation?” and you are likely to get 10 different answers ranging from smartphones to artificial intelligence to the Internet of Things (IoT)
. No matter how you define it, the digital transformation is here and it is having a significant impact on every organization and its networking requirements.
The need for businesses to deal with the impacts of changing technology is nothing new. Creative destruction means that old products, methods and services inevitably must give way to the newer alternatives. The pace, however, of those technological changes continues to accelerate. Today, businesses are faced with a myriad of transformation decisions.
Yet change is inherently risky. To move too fast runs the risk of heading down a dead-end path where costly decisions will ultimately need to be reversed. To move too slow means being left with older, costlier technologies and infrastructure, leaving the organization less competitive in a fast-changing marketplace. No one wants to be the pony express rider in the age of the telegraph or the candle maker in the age of the lightbulb.
Now, more than any time in the last decade, we see businesses rethinking their approach to networking as ethernet, broadband and wireless become the standard for access, replacing traditional time division multiplexing (TDM) networks to support an increasingly digital world. Carriers are planning, or in some cases implementing, the retirement of traditional voice networks in favor of Internet Protocol (IP) and cloud-based solutions. Infrastructure is evolving as more companies take advantage of cloud solutions, both for major hardware components as well as an ever-greater variety of computer applications.
And with the IoT appearing poised for hyper-growth, many corporations are stymied on what to do and how to do it. They know change is here, but the questions of what changes to make, how best to make them and when it is the optimal time still perplex many corporate decision makers.
Over the last few years, my colleagues and I have assisted numerous companies in addressing these very questions and have established a basic set of criteria to help navigate network transitions.
Point 1: Understand where you are. This is frequently an overlooked aspect of network transformations. Too often we see companies attempting to plan for the future without fully understanding where they are today. One of the main reasons they take this approach is they don’t have a good inventory or fully understand what services they are using or have in place. The risk here is twofold. First, a detailed understanding of current services and usage helps create a better plan for future services and how they will be utilized. Understanding the scope of current services allows for more accurate planning and better sizing of new services. Full knowledge of essential services and spending is crucial for accurate financial modeling of the impact that a service transformation will have. Without that knowledge, companies are forced into a rule-of-thumb, one-size-fits all approach. While that may work at a high level across the organization, it is rarely workable at the detailed level, with either too much or too few of the new services designed and designated to those individual sites or users. Second, without a comprehensive baseline of the current services in place, enterprises run the risk of continuing to pay for services they don’t need as they don’t know what (or when) to discontinue them. This lack of insight into current services can have a significant negative impact to any ROI planned for the service transformation. The ability to turn down those legacy services when they are no longer needed is critical.
Point 2: Understand where you want to go. Today’s technology marketplace is highly competitive. New, non-traditional vendors are emerging with new products and services that can satisfy both legacy needs and establish a forward-looking technology framework. Early adopters of the right solution can gain an advantage over the competition, but we often see individual lines of business driving a variety of uncoordinated changes across the enterprise. Knowing they need to adapt – but not knowing how – puts tremendous pressure on the enterprise, which can impede decision-making, particularly in those organizations that don’t communicate well and coordinate effectively across IT, individual business units and finance. These organizations risk embracing sub-optimal solutions. At the same time, care needs to be taken to fully vet new solutions to ensure they meet the company’s transformation needs – aligning current and future network requirements with digital transformation efforts in a comprehensive approach. The most successful transformation efforts reflect a detailed vetting of the potential solutions and close coordination of key groups across the organization to tightly link stakeholder business requirements and outcomes.
Point 3: Managing your vendors.
Once an enterprise knows where it is and where it is going, it needs to implement the required changes. Whether you are considering a new vendor to help you with your networking needs or transforming your network with your current vendor, careful planning of the transition is critical. Managing your vendors
to ensure a smooth transition is an important part of that process. Part of that vendor management process is understanding your contract and commitments to your current vendor. Even if you are maintaining the same vendor when you transition services, you’ll need to understand how that transition could impact your agreement. Questions to ask yourself include:
- Does the transition lower your spend?
- Do the new services still contribute to your commitment levels?
- How does a changing pricing structure and new buying paradigm factor into your spend profile?
- Will you still meet your commitment levels?
- Do you have business change provisions (e.g. technology change) or ramp down provisions that can be invoked?
- What termination and/or startup fees will you incur and how much time will you need before turning down legacy services?
- As part of any new network contract, you’ll want to minimize and plan for any commitments and ensure that the transition is carefully scoped so that you don’t get caught out of contract on your services
Today, more than ever, the philosophy seems to be adapt or die. Think about it - of the 500 companies in the Fortune 500 in 1955, 440 are no longer there. What happened to companies from that era like American Motors, Studebaker and Zenith Electronics?
As companies face increased competitive and price pressures, they will need to adapt. They need to identify what they have that isn’t working, devise the right type of networking technology to meet current and future needs and make an effective transformation. These are all critical steps in remaining competitive and viable, and necessary so they don’t become the next extinct Fortune 500 enterprise.